A tweet by @mikesmayer got my attention recently:
The Most Counterintuitive Sales Strategy You’ve Ever Read: http://t.co/NJyiSbrH
This links to a post on the “New Sales Economy Blog” (Chad Levitt) making, among other points, that splitting the sales process into three functions is more efficient than having a single profile (the salesperson) manage all three: prospecting, developing and closing, managing the client post-sales (as further developed on the “For Entrepreneurs” resource website).
Having managed technology sales teams for years, I thought about how this related to my past experiences.
'Taylorist' Enterprise Software Sales at Kenan / Lucent (back then, there)
Particularly relevant was the sales process management we had implemented at Kenan Systems (later purchased by Lucent Technologies to become Lucent’s Software Products Group under Kenan Sahin).
At Kenan / Lucent, I was a director of Sales for telecoms operators in Europe, selling OSS/BSS systems to new carriers or as a replacement for older, in-house billing systems with ‘traditional’ telcos. I was responsible for sales over the whole Europe and Mediterranean region. Enterprise sales at its best.
Together with the executive team we had come up with an innovative (at the time) way to structure the sales process, with each ‘stage’ being assigned to a different person, in line with the recommendation Chad Levitt makes in his post:
- Lead generation and qualification (=”prospecting”, both inbound and outbound) was a role of the Marketing team.
- Developing and closing the sales was the responsibility of Sales.
- Post-sales client management (including ‘inside’, or repeat, sales) were assigned to specially recruited ‘Client Success Managers’ reporting into the professional services team.
Our sales teams were made of bright, dual profile people (usually tech education followed by business school). Qualifiers were typically equally bright people, typically junior marketing professionals. The CRMs were often technical people who had demonstrated talent and taste for relationship management at the highest level.
This structure worked well in the context of the explosion of the mobile market in the late 1990’s, with carriers popping up everywhere in Europe and incumbents racing to adapt to the new industry.
Where Did The Relationship Go?
However, it became clear that there was a significant flaw in this model, especially after the integration with Lucent Technologies.
By assigning prospect qualification to people different than those who would later be in charge of closing the sale, we were introducing several friction points and were losing on sales efficiency on multiple levels:
- The all-important mutual discovery phase, when a prospect offers early on much information that won’t be shared once the sale dynamics is established, was being overlooked. This is because our qualifiers were not sales people, and were often unaware of the importance of going beyond the pre-set qualification questions to maximize chances of closing the sale later on. For those qualifiers who knew to go beyond the qualification questions, we had a hard time getting a process in place that would transmit in a productive way to the sales persons all the information that had been gathered.
- The client got quickly handed out by the qualifier to the sales person (the ‘closer’), sometimes with mixed feelings. We had underestimated the importance of a good intuitu personae in closing large software sales. Clients often felt they were being ‘mechanized’ and never opened up again to the sales person, contrary to what we had thought. We were losing big time on client intimacy.
- The sales experience feedback loop was faulty: qualifiers developed an expertise in qualifying prospects only based on the assessment of their performance by management, not by learning from completing the entire sale process to the closing. And whatever sales people learned from their closings was very difficult to then feed back into the qualifiers.
The integration with Lucent Technologies removed whatever personal initiative and creativity the team had crafted to make this split process work. The burden of a large structure’s own additional processes and policies left little room to go beyond the process and eroded the ‘team spirit’ that was the ‘magic sauce’ of such a risky sales process.
The Price We Paid
We were lucky that the environment was so positive and our sales grew to hundreds of millions of Dollars in just a few years. However, the company paid a hefty price. The sales team (mostly highly qualified 30-somethings with both a technical degree and an MBA) lost interest and grew demotivated. They had found gratification in succeeding in the driving a complete sales process, less in being ‘serial closers’. Because they were making their (agressive) targets, they hung on. For a while. But the management, alerted of the issue, chose to not react. The numbers were good, so why worry?
Then most of the Europe sales team left. They had lost interest in their jobs, despite the high financial rewards, because the process in place did mot leave room for building sustainable relationships with their clients. This is what good sales people are: relationship builders, not pen holders.
This left the company without a strong sales force at a critical time in its developement, and is a likely contributing cause to this unit being divested a little after this to CSG Systems:
“Kenan lost its focus and momentum once it became part of a huge telecom equipment provider,” said Peter Kalan, senior vice president and chief financial officer for CSG.
Lost its focus? Maybe. Lost its sales people? Indeed.
No sales process is inherently good or bad; however two key questions absolutely need to be addressed when deciding on a given structure / sales process:
- How much does the sales rely on a good intuitu personae between the client and the sales person? (the answer to this should be explored by looking at the business the client is in, and in the nature / size / complexity of the sale)
- Is the sales process team ready for this? Do they have the flexibility / time / incentives / spirit to make it work?